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Have you done your taxes yet? The deadline for filing is looming so you may want to start thinking about it. I had my taxes done 2 weeks ago and I’m happy to cross that off my massive to-do list. I used to do my taxes myself years ago, but since I got involved in selling stuff at eBay and Amazon, internet marketing, and blogging, my taxes have gotten a lot more complicated. Because of this, for the past 7 years I’ve had my taxes prepared by an IRS enrolled agent who is very well versed on tax deductions for bloggers.
What is an enrolled agent? The IRS defines an enrolled agent as follows:
“An enrolled agent is a person who has earned the privilege of representing taxpayers before the Internal Revenue Service by either passing a three-part comprehensive IRS test covering individual and business tax returns, or through experience as a former IRS employee. They must adhere to ethical standards and complete 72 hours of continuing education courses every three years.”
Many people opt to use software to do their taxes, but because it’s software, it’s not always able to determine which deductions can be taken advantage of. Software will only manipulate the information given to it, but is not smart enough to know where exceptions or special situations arise, so while having my taxes done professionally is pretty pricey, for me it’s totally worth it.
If you run a blogging business and host a blog on your own domain, pay for Internet subscription fees or make other purchases related to your blog, you may be wondering which tax deductions you can take. Many people don’t realize the number of tax deductions for bloggers. Some of the more obscure deductions go beyond the basic business expenses, such as telephone and Internet connection, networking, travel and home office deductions. As bloggers, we spend a substantial amount of time and resources developing and sustaining and trying to grow our blogs. Fortunately, there are several options out there to help you to recoup the costs associated with earning a living from blogging, which will hopefully reduce your tax liability.
Internet-Related Expenses
Internet-related expenses include more than your monthly subscription fees, though you can write those fees off too. You actually have several options for tax write-offs related to your Internet expenses. Since bloggers spend a substantial amount of time and money using the Internet, you can take several deductions. You can deduct your domain name and hosting fees. Fees related to the purchase of stock photography, such as products offered by Big Stock Photos, can be deducted. Other deductions include research software, advertising fees, search engine optimization services, social media consultations, social media advertising costs, antivirus software and web development and design fees.
Product Purchases
Bloggers use a number of tools, such as plug-ins or add-ons, to increase the functionality and automation of their sites. If you paid for certain products, you can deduct those too. Some examples include premium plug-ins, such as Social Toolbar Pro, or premium blog themes like Studiopress or Headway. You can also deduct purchases for software programs like Photoshop or web design management tools. Another common product used by bloggers is the keyword research tool, which you can also deduct. You can deduct fees if you paid for the creation of videos and related content.
Knowledge Deductions
If you spent any money towards education products, you can deduct those too. For example, if you attended seminars directly related to blogging or your field, those may qualify. Rental cars, parking expenses, tolls, mileage and hotel charges can also be deducted if the expense is business related. Other examples include book and eBook purchases. You can even deduct library fees if they are associated with your blogging education or a related field. Conference registrations, magazine subscriptions and association membership fees are also deductible.
General Deductions
Some tax write-offs are pretty obvious. You can take deductions for the space used in your home office or for the letterhead you use to send sales copy. You can deduct the cost of your computer or laptop that is used exclusively for your blogging business. Some additional equipment deductions include printers, voice recorders, dedicated business lines, backup hard drives, cameras and memory cards, mailing and post office box fees. PayPal fees and a portion of your mortgage or rent, utilities and renters insurance can also be deducted.
I’m hoping that you found this useful. I’ve learned a lot from my enrolled agent regarding exemptions and deductions and wanted to share some of the things I’ve learned here with you, because chances are, you’ve probably missed or overlooked some in the past.
Here are a few more resources I found that deal with tax deductions for bloggers and businesses:
7 Top Tax Deductions for Small Businesses
101 Tax deductions for bloggers and freelancers
Most Overlooked Small Businesses Tax Deductions
photo credit – © JohnKwan – Fotolia.com
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